28 June, 2020

Iberia has no option - it must downsize.

A stalwart of Iberia's long-haul fleet the Airbus A340 will be withdrawn                                                   Photo Ibera
The global Coronavirus COVID-19 pandemic and its resulting crash in demand has left many airlines the world over struggling to cope and forcing them to reassess their futures.  Iberia is no exception, the Spanish airline, part of the massive International Consolidated Airlines Group IAG, will have no other option but to downsize, if it wants to survive in the future. 

Luis Gallego Martin, the airlines CEO told local media that he plans to extend the ERTE - the temporary layoff or furlough of staff, until the end of the year. The carrier has been losing north of €7 million each day of lockdown  He also confirmed the largest airline in Spain, will have to cut the number of destinations it serves and how frequently it flies to others as it looks to dramatically cut costs to emerge a leaner more profitable operation.

Iberia will, Gallego confirmed, be withdrawing its 17 four-engined long-haul Airbus A340-600 aircraft from its fleet in the near future.  

"In Iberia, we will be smaller, but we will exist, something that it is not clear other airlines will be able to say," he said in an interview with  El Pais, published today. "Smaller, unfortunately, with the capacity adapted to the demand. We will have fewer planes, fewer flights and fewer destinations."

Gallego also has a grim prediction for the future,  demand he says will not go back to pre-COVID levels until 2023 or 2024. How much smaller a downsized Iberia will be by then is remains to be seen, yet I'd be surprised if it didn't emerge around 35% smaller, leaner and far more nimble. 

Prior to the current Coronavirus COVID-19 pandemic, Iberia was looking to grow from 107 aircraft to a fleet of 112 by the end of 2022

The airlines A350s will take over much of the work previously conducted by the A340s                                         Photo Iberia

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